Charter Communications has reached a significant agreement to acquire Liberty Broadband in an all-stock deal, with details announced on Wednesday. Charter, a leading broadband connectivity provider and cable operator under the Spectrum brand, is set to absorb Liberty, a company with diverse interests in communication businesses. In this transaction, holders of Liberty's series A, B, and C common shares will receive 0.236 of a Charter common share for each share held.
Meanwhile, Liberty's series A preferred shares will be exchanged for one share of newly issued Charter preferred stock. Prior to finalizing the acquisition, Liberty plans to spin off its GCI business by distributing shares to its stockholders. The deal is anticipated to conclude by June 30, 2027, contingent on the successful execution of the GCI spin-off.
Charter expects to retire approximately 45.6 million shares currently owned by Liberty and will issue 34 million shares to Liberty shareholders upon closing. Liberty is also managing significant financial obligations, including $2.6 billion in existing debt, which will either be settled before closing or assumed by Charter.
Additionally, $180 million of preferred equity will transition to Charter's ownership. In Wednesday's trading session, Charter shares experienced a notable increase of 5.7%, while Liberty's series A and C common shares witnessed a decline of around 3% each. Liberty's CEO, Greg Maffei, commented on the deal, stating, 'This transaction simplifies our corporate structure and allows our shareholders to participate in Charter's upside through direct ownership of the equity.' Maffei will resign at the end of the year, looking forward to his role as a director and a shareholder at Charter. Liberty Broadband originated from Liberty Media in 2014.
In a separate announcement, Liberty Media revealed plans to separate Liberty Live Group into an independent entity. Maffei, along with Liberty Chairman John Malone and specific related stakeholders, have agreed to support the deal by voting in favor of the acquisition of Liberty Broadband. Earlier this month, Charter reported impressive third-quarter results, demonstrating year-over-year growth that surpassed market expectations, primarily driven by robust revenue increases in residential mobile services and advertising..